Client issued 1099-Misc under wrong EIN, now what?

[AZ-Tax]

Client issued 1099-Misc under wrong EIN, now what?

Client has 1 S-Corp and 1 LLC. Client issued 1099-Misc under wrong Business therefore wrong EIN. I understand a Corrected 1099-Misc can be filed what about the recipients since the dollar amount has not changed? For those recipients (group 1) that have already filed their tax return and entered their 1099-Misc data into the 1099-Misc worksheet, will they need to file an amended tax return? I would think those recipients that entered the Box 7 amount on line 17 of the "other taxable income" would not have a need to amend their tax return and same goes with those recipient's that entered their Box 7 amount on line 1a of Sch C (group 2).

If both are no, does IRS still require the Filer to mail out a corrected 1099-Misc to all recipients?

[Koss]

Corrected 1099-MISC

I'm not sure what you mean by "Group 1" and "Group 2", but I'm going to try to answer your question.

I agree with one part of your conclusion: The tax returns that were filed by those who received an incorrect 1099-MISC will not need to be amended. The EIN of the payer on a 1099-MISC should not appear anywhere in the tax return. Because the amount of income has not changed, there is no change at all to the recipient's tax return, so there is nothing to amend.

You referred to entries in the "1099-MISC worksheet," but that worksheet is not part of the tax return, and it is not sent to the IRS. In fact, that worksheet is not even published by the IRS. It is a creation of your tax software. (Some worksheets are IRS documents, e.g., taxable social security benefits, or capital gain tax rates. But even those worksheets are not part of the return. They are not transmitted to the IRS in an electronic return, and they are not attached to a paper return.)

But I do think that from a procedural standpoint, a corrected 1099-MISC should be sent to the recipients. Each recipient should actually receive two Forms 1099-MISC. One should be the corrected Form 1099-MISC with the "wrong" EIN, and the amount should be changed to zero. They should also get a new Form 1099-MISC with the correct EIN and the correct amount.

You could send both forms in one envelope, with a short note explaining the error, and advise the recipient that because the amount has not changed, they do not need to amend their tax return.

BMK